Groovy Bank Play...

Discussion in 'Stocks' started by stonedinvestor, Jan 29, 2007.

  1. The stonedinvestor likes banks about as much as funerals. This is stuff you pay people to pick they are all so familiar and boring. Every now and then a small one catches my eye and that is the case with a bank from San Franciso's Chinatown- UCBH Holdings.

    UCBH already has a branch in Hong Kong and they have boosted assets to the required $10 billion stop China. Obviously ties run deep between UCBH and China with many Chinese over here sending back funds etc. The goal: take China from 2% of total earnings to 20% in five to ten years.

    Friedman Billings Ramsey has it as there top pick in small caps! When you get a bank into your portfolio and it just happens to be a top pick in small caps: congratulations you are stonedinvesting! I went through the recent earnings report and I REALLY liked what I read. So did S&P. ? 01/26/07 11:59 am EST... S&P REITERATES BUY
    HOLDINGS INC. (UCBH 18.53****): UCBH posts
    Q4 EPS of $0.27 vs. $0.26, $0.02 below our esti-
    mate. 13% loan growth during the quarter is
    well above our forecast, and credit quality was
    strong, with non-performing assets at 0.15% of
    total. The company forecasts 14%-16% loan
    growth in '07, and $1.13-$1.15 EPS. We are re-
    ducing our '07 EPS estimate to $1.15, from $1.20,
    on flat yield curve pressure we expect. however-
    er, we are optimistic about UCBH's international-
    al growth strategy and credit quality, and are
    keeping our 12-month target price of $22, based
    on a premium-to-peers multiple of 19X our '07 .

    That little downer bit about the flat yield curve- that could become a positive tailwind at some point- if the Fed sticks to his guns.

    I'm buying today. ~ stoney
  2. 12 month target $22 and we are at $20 already Folks in a month. Is this wrong? Out of proportion? This pick has far excelled the financial sector and the broad market- is there any reason to sell it? I don't think so but you know there is this sub prime thing that does affect banks and brokers and who knows who else-- These spreads on bad debt some folks are in deep and it could unwind in a nasty way-- not for UCBH I don't think and it's off to China we go ! Heidi Ho. what a great call this was!